One in five Silicon Valley office buildings is vacant • Hacker News Board

Re: One in five Silicon Valley office buildings is vacant

#21

Post by MrFoof » Fri, Oct 06, 2023, 9:40 PM UTC

quickthrowman wrote: post #20

MrFoof wrote: post #11

Two Class B office buildings totaling ~150,000 ft2 in Boston just sold for $4.1M, when in 2016 they had previously sold for $16M https://archive.ph/AADPP . Here's the location: https://maps.app.goo.gl/ezkNUEPAVCJJ2rps8 Things to note: * Within HALF A BLOCK of Boston Common * Within one-to-two short blocks of THREE subway stations serving THREE of the four subway lines * A Dunkin' Donuts 30 seconds away on foot, with…

> The monthly rent for Class B in 2022 was $32-38/ft2. That is not the monthly lease rate. All commercial property lease rates are quoted as dollars per square foot per year.

You are correct, my bad! Updated my post.

Re: One in five Silicon Valley office buildings is vacant

#22

Post by quickthrowman » Fri, Oct 06, 2023, 9:46 PM UTC

MrFoof wrote: post #21

quickthrowman wrote: post #20

Earlier quoted context omitted.

> The monthly rent for Class B in 2022 was $32-38/ft2. That is not the monthly lease rate. All commercial property lease rates are quoted as dollars per square foot per year.

You are correct, my bad! Updated my post.

Based on this tenant space listing [0] the building appears to have around 40k sq ft of leasable space. That works out to around 3.25 years of rent assuming 40k sq ft leasable at $32/sq ft.

It’s definitely not a good sign for commercial office space, that’s for sure.

US 30 year bonds are yielding 5%, that’s much more attractive than a half-leased Class B office tower with an 8% mortgage right now.

[0] https://bradvisors.com/wp-content/uploads/2019/04/33-41WestS...

P.S. Sorry about the nitpicking :)

Re: One in five Silicon Valley office buildings is vacant

#23

Post by kalupa » Fri, Oct 06, 2023, 9:47 PM UTC

while this sucks for commercial property owners and the plethora of businesses that have supported the office work life for so long, time for them all to adapt and move on.

SF is a boom/bust town, they're used to it, right?

Re: One in five Silicon Valley office buildings is vacant

#24

Post by toomuchtodo » Fri, Oct 06, 2023, 11:27 PM UTC

quickthrowman wrote: post #22

MrFoof wrote: post #21

Earlier quoted context omitted.

You are correct, my bad! Updated my post.

Based on this tenant space listing [0] the building appears to have around 40k sq ft of leasable space. That works out to around 3.25 years of rent assuming 40k sq ft leasable at $32/sq ft. It’s definitely not a good sign for commercial office space, that’s for sure. US 30 year bonds are yielding 5%, that’s much more attractive than a half-leased Class B office tower with an 8% mortgage right now. [0] https://bradvis…

Consider that a lot of these mortgages are not yet at 8%. There is about $1.5T in commercial debt coming due before 2025.

https://archive.ph/ku9Xr | https://www.bloomberg.com/news/articles/2023-04-08/a-1-5-tri...

Re: One in five Silicon Valley office buildings is vacant

#25

Post by techdragon » Sat, Oct 07, 2023, 2:29 AM UTC

quickthrowman wrote: post #20

MrFoof wrote: post #11

Two Class B office buildings totaling ~150,000 ft2 in Boston just sold for $4.1M, when in 2016 they had previously sold for $16M https://archive.ph/AADPP . Here's the location: https://maps.app.goo.gl/ezkNUEPAVCJJ2rps8 Things to note: * Within HALF A BLOCK of Boston Common * Within one-to-two short blocks of THREE subway stations serving THREE of the four subway lines * A Dunkin' Donuts 30 seconds away on foot, with…

> The monthly rent for Class B in 2022 was $32-38/ft2. That is not the monthly lease rate. All commercial property lease rates are quoted as dollars per square foot per year.

Except outside America where it’s metric… also as someone who’s gone hunting for commercial space before, it’s kinda only 97% true that it’s always per year… there’s an irritating countercurrent of people that try and trick you into thinking something overpriced is a bargain by quoting the inflated prices at 1/12th the cost because that’s the monthly not the yearly, and people who just deliberately want to game various “by lowest price” sorting mechanisms on property listings websites.

Re: One in five Silicon Valley office buildings is vacant

#26

Post by rs999gti » Sat, Oct 07, 2023, 3:16 AM UTC

juunpp wrote: post #17

In SF you will find entire floors vacant while the homeless camp outside.

This is a feel good comment, but the reality is these building are not designed for residential use and would require substantial build out to be habitable for multiple residents.

Now if the thought is just to move the homeless eyesore out of site, then open office space might work.

Re: One in five Silicon Valley office buildings is vacant

#27

Post by fakedang » Sat, Oct 07, 2023, 6:44 AM UTC

jbverschoor wrote: post #18

SF or the whole bay?

> These office markets are the Silicon Valley’s weakest by availability rate, according to the report:

Santa Clara, 29.1%

Mountain View, 26.6%

Campbell/Los Gatos, 24.4%

Palo Alto, 23.1%

San Jose, 19.7%

Sunnyvale, 14.3%

Los Altos, 13.9%

Re: One in five Silicon Valley office buildings is vacant

#28

Post by j7ake » Sat, Oct 07, 2023, 6:47 AM UTC

rs999gti wrote: post #26

juunpp wrote: post #17

In SF you will find entire floors vacant while the homeless camp outside.

This is a feel good comment, but the reality is these building are not designed for residential use and would require substantial build out to be habitable for multiple residents. Now if the thought is just to move the homeless eyesore out of site, then open office space might work.

I think parent is suggesting that it’s absurd that a building not designed for residential use is an excuse to not let people inside who are camping at their doorsteps.

Re: One in five Silicon Valley office buildings is vacant

#29

Post by klyrs » Sat, Oct 07, 2023, 9:27 AM UTC

rs999gti wrote: post #26

juunpp wrote: post #17

In SF you will find entire floors vacant while the homeless camp outside.

This is a feel good comment, but the reality is these building are not designed for residential use and would require substantial build out to be habitable for multiple residents. Now if the thought is just to move the homeless eyesore out of site, then open office space might work.

I read it as an observation about misallocation. SF has had no real trouble building, but what got built isn't helping the town.

Re: One in five Silicon Valley office buildings is vacant

#30

Post by fragmede » Sat, Oct 07, 2023, 12:17 PM UTC

rs999gti wrote: post #26

juunpp wrote: post #17

In SF you will find entire floors vacant while the homeless camp outside.

This is a feel good comment, but the reality is these building are not designed for residential use and would require substantial build out to be habitable for multiple residents. Now if the thought is just to move the homeless eyesore out of site, then open office space might work.

To bring it up to code, is a very different situation than make it livable, especially when compared to living in a tent on the street.

If you gave me a floor of a commerical building that was mine, that I was allowed to build in and improve how I saw fit, I'd take that in a heartbeat. If there's an Kafkaesque set of red tape, then forget it.